07/08/2026 02:37 AST
Saudi food and retail group Savola reported a 36 percent increase in 2026 first-half net profit, driven by stronger operational performance in its food processing business and resilient retail performance despite a competitive market environment.
Net profit rose to SR401 million ($106.9 million) in the first six months of the year, up from SR295 million over the same period of 2025, while revenue increased 3.9 percent to SR13.6 billion from SR13.1 billion, according to a Saudi Exchange filing and the company's earnings release.
The food processing segment was the main contributor to growth, with higher volumes offsetting lower average selling prices, particularly in sugar, supporting revenue growth.
The retail segment recorded nearly 1 percent revenue growth, supported by an expanded store network and e-commerce revenue, which grew about 2.5 times year on year, despite intense competition in the Saudi grocery market.
The results align with the continued growth in Saudi Arabia's retail sector, as consumer spending rose 6.8 percent year on year to SR425 billion in the first quarter of 2026, according to a recent Knight Frank report, reflecting resilient consumer demand.
Sameh Hassan, Savola Group CEO, said: "Our first-half performance reflects the resilience of Savola's food and retail platforms and the discipline of our teams.
"Our priority throughout the period for the food sector was clear: to maintain dependable availability of staple food products for consumers across the markets we serve while navigating a more complex regional geopolitical and logistics environment."
He added: "Overall, disciplined commercial execution and fit-for-purpose efficiency initiatives helped us improve underlying earnings while continuing to invest in supply-chain resilience, local manufacturing capability and the customer proposition."
Earnings up, expenses down
Headquartered in Jeddah, Savola Group has operations across Saudi Arabia, Egypt, the UAE, Algeria and other Gulf Cooperation Council markets. The group manufactures and distributes sugar, edible oils and other food products, with exports reaching markets across the Middle East, Africa, Europe and Asia.
Second-quarter net profit increased 10.3 percent year on year to SR117 million on higher revenue. However, earnings declined from the first quarter as first-quarter results included a one-off gain related to the disposal of the group's Sudan operations.
The group's first-half earnings before interest, taxes, depreciation, and amortisation margin improved by 70 basis points to 9.7 percent, while operating expenses declined to 14.5 percent of revenue from 15.2 percent a year earlier.
Shareholders' equity increased to SR5.36 billion as of June 30, compared with SR4.89 billion a year earlier, reflecting the group's stronger financial position.
Market insight
Daniel Al-Banna, financial market analyst at First Financial Markets, told Arab News that Savola's latest results reflected stronger profitability driven primarily by improved operational efficiency and margin expansion rather than revenue growth alone.
"The significant improvement in profitability indicates that Savola was able to generate more value from its existing operations through better cost management, improved operational efficiency, and stronger margins," he said.
Al-Banna added that the retail business remained resilient despite fierce competition in the Saudi market, supported by tighter cost controls and operational discipline.
Arab News
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